J
Ö N K Ö P I N GI
N T E R N A T I O N A LB
U S I N E S SS
C H O O LJÖNKÖPI NG UNIVER SITY
M e d i a C h a n n e l s i n a r e g u l a t e d
m a r k e t
A case study of ABSOLUT VODKA
Paper within Marketing Management Author: Cecilia Elmervik
Karin Funck Tutor: Jenny Balkow Jönköping October 2006
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Table of Contents
1
Introduction... 1
1.1 Background ...1 1.2 Problem discussion ...3 1.3 Purpose ...3 1.4 Definitions...4 1.5 Disposition...42
Company information – ABSOLUT VODKA ... 6
2.1 In the United States ...6
2.2 In China ...7
3
Methodology ... 8
3.1 Qualitative and Quantitative methods...8
3.2 Case study ...8
3.3 Primary and secondary data...9
3.4 Interviews ...10
3.4.1 Choice of respondents...10
3.4.2 Question Guide ...11
3.5 Reliability and Validity...12
4
Frame of Reference ... 13
4.1 Media Channels ...13
4.1.1 Print media ...13
4.1.2 Broadcast media...16
4.1.3 Internet marketing...17
4.1.4 Media Channels in the United States and China ...18
4.2 Dimensions of culture ...20
4.2.1 Power distance...21
4.2.2 Individualism vs. collectivism...21
4.2.3 Masculinity vs. Femininity...22
4.2.4 Uncertainty avoidance...22
4.2.5 Long term orientation...22
4.2.6 Culture in the United States and China ...23
4.3 Communication ...24
4.3.1 Communication style ...24
4.3.1.1 High-Context and Low-Context Communication ...24
4.3.1.2 Direct vs. Indirect Modes of Communication ...25
4.3.1.3 Verbal Communication Styles...25
4.3.1.4 Non Verbal Communication Styles ...26
4.3.2 The American and Chinese advertising style ...26
4.4 Business Ethics and Regulated Marketing ...27
4.4.1 Marketing Ethics...27
4.4.2 International Business Ethics ...28
4.4.3 Business Ethics in the United States and China...28
4.4.4 Regulated Marketing in the United States and China...29
5
The ABSOLUT VODKA Case ... 30
ii 5.1.1 Media Channels ...30 5.1.2 Communication ...31 5.1.3 Dimensions of Culture ...31 5.1.4 Business Ethics ...32 5.1.5 Regulated markets ...32
5.2 ABSOLUT VODKA in China ...32
5.2.1 Media Channels ...32 5.2.2 Communication ...33 5.2.3 Dimensions of Culture ...34 5.2.4 Business Ethics ...35 5.2.5 Regulated Market ...35
6
Analysis ... 36
6.1 Media Channels ...36 6.2 Communication ...386.3 Business Ethics and Regulated Markets ...40
7
Conclusion ... 42
7.1 Suggestions for further studies...43
References ... 44
Table of Figures
Figure 1 - Disposition ...5iii Bachelor thesis within Marketing Management
Title: Media channels in a regulated market – A case study of ABSOLUT VODKA Authors: Cecilia Elmervik, Karin Funck
Tutor: Jenny Balkow Date: 2006-10-24
Subject terms: Media Channels, Regulated Market, United States, China, Culture, Commu-nication.
Abstract
It is widely known today that marketing plays an important role for the success of a com-pany. The process of marketing is extremely complicated as it is, thus there are markets where this process is complicated even further. In these regulated markets, factors occur during the launching and marketing of a product that interferes with the marketing activi-ties. In these markets advertisers has to obey to laws and rules on how to advertise their products. One of the most regulated markets today is the one of alcoholic beverages. The two largest consumer countries of alcohol today are the United States and the Republic of China. Even though these countries have some similarities as the two largest consumer markets in the world, laws, regulations and attitude towards alcohol vary greatly between them making the process of penetrating the markets even harder.
The purpose with this thesis is to get an understanding of how differences in the choice of media channels in the United States and China can be explained by differences in culture and ways of communication as opposed to legal and ethical restraints.
This thesis will be carried out as a case study on ABSOLUT VODKA. The authors have used a qualitative approach to the problem at hand together with structured and unstruc-tured interviews with employees at ABSOLUT VODKA that have knowledge about the American and Chinese market Due to limited contact possibilities the empirical findings will also be based on secondary data.
The authors have reached the conclusion that ABSOLUT VODKA has to first of all clearly identify its target group to be able to use the media channels efficiently. The authors believe that differences in media channels between China and the United States can to some extent be explained by differences in culture, communication, regulations and ethics. The concepts that are believed to have most impact are believed to be the ethical and moral considerations. Thus the authors are also of the opinion that the factors mention above has a heavier impact on the design of the advertisement than it does on the choice of media channels operating in a regulated market
iv Kandidat uppsats i Marknasföring
Titel: Mediakanaler i reglerade marknader – En fallstudie om ABSOLUT VODKA Författare: Cecilia Elmervik, Karin Funck
Handledare: Jenny Balkow Datum: 2006-10-24
Ämnes ord: Mediekanaler, Reglerad Marknad, USA and Kina, Kultur, Kommunikation. Sammanfattning
Det är vanligt vetande idag att marknadsföring spelar en viktig roll för framgångarna av ett företag. Denna process av marknadsföring är extremt komplicerad som det är, dock finns det marknader där denna process är försvårad ytterligare. I dessa reglerade marknader finns det faktorer under lanseringen och marknadsföringen av en produkt som stör marknads ak-tiviteterna. På dessa marknader måste marknadsförare följa lagar och regler angående hur markandsföringen av deras produkter får ske. En av de mest reglerade marknaderna idag är alkohol marknaden. De två länder som konsumerar mest alkohol idag är USA och Kina. Även om dessa två länder har vissa likheter som de två största konsument marknaderna i världen så skiljer de sig åt när det gäller lagar, regler och attityder angående alkohol vilket gör processen att penetrera dessa marknader ännu svårare.
Syftet med denna uppsats är att få en förståelse om hur val av media kanaler i USA och Kina kan förklaras med skillnader i kultur, tillvägagångssätt i kommunikation i motsats till legala och etiska hinder.
Denna uppsats kommer ha formen av en fallstudie som avser ABSOLUT VODKA. För-fattarna har använt sig av en kvalitativ infallsvinkel till problemet med strukturerade och ostrukturerade intervjuer med anställda inom ABSOLUT VODKA som har kunskap om amerikanska och kinesiska marknaderna. På grund av begränsade kontakt möjligheter med företaget kommer den empiriska delen även grundas på sekundärdata.
Författarna har nått slutsatsen att ABSOLUT VODKA måste först och främst identifiera deras målgrupp för att kunna använda mediekanalerna effektivt. Författarna tror även att skillnaderna mellan mediekanalerna i Kina och USA kan till en viss grad förklaras genom kultur, kommunikation, lagar och etik. De som verkar ha mest inflytande är etik och moral. Författarna tror även att de nämnda faktorerna har större inflytande på själva reklamen än av valet av mediekanaler.
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1 Introduction
In this chapter there will be a presentation about the background, problem, method and purpose of the the-sis. This is necessary to get fundamental knowledge about the specific research problem at hand. The back-ground will lead the way to the problem discussion, which will further lead to the purpose. There will also be a part of this chapter that is devoted to the definitions of terms used in the research. Finally there will be a
model of the disposition, which explains the structure of the thesis.
1.1 Background
It is commonly known today that marketing plays a vital role for the upbringing and sur-vival of a company and its products. Marketing conducted and communicated in the right way is one of the key components between failure and a success story. The process of mar-keting a brand is complex as it is, thus there are factors and markets that makes this process even harder.
These factors occur when launching and marketing a product in a regulated market. Ac-cording to Wikepedia (2006), when advertising in a regulated market one must obey the laws and rules defining the ways in which products can be advertised in a specific region. These rules and laws can touch on a variety of aspects concerning the marketing of a prod-uct such as placement, time and content (Wikepedia, 2006). The authors therefore find this subject of interest since there are no books or theories to follow on how to market a prod-uct successfully in a regulated market, and yet there are companies that have done it suc-cessfully.
One of the most regulated markets in the global economy today is the one of alcoholic beverages and the two largest markets in the world of alcoholic beverages are the United States and the republic of China (Taylor & Raymond, 2000). These countries are also the two largest consumer markets in the world today. However laws, regulations and attitudes toward alcohol vary between these two countries which make the process of penetrating the world’s two largest consumer markets even harder.
This leads us to the subject of interest and also the debate about alcohol and advertising. The alcohol and advertising industries argue that since the alcoholic drink is a legal product so should the advertising of the product be and that bans on alcohol advertising would have unfavourable effects on the alcohol market and the media. They also claim that implementing bans are not justified since alcohol advertising is concerned with promoting sales of individual brands and there is no evidence of a link between advertising of alcohol and the overall level of alcohol consumption or the amount of alcohol related harm (Ias fact sheet, 2005).Further more; the World Health Organisation’s (WHO) European charter on alcohol, claim that children and teenagers should grow up in an environment that is se-cluded from the negative consequences of alcohol consumption and, as much as possible, from the advertising of alcoholic beverages (Ias fact sheet, 2005).
The main counter arguments are that as well as promoting different brands, alcohol advertising is also concerned with finding new drinkers and increasing sales among existing ones, especially heavy consumers (Ias fact sheet, 2005). It is also argued that intensive advertising and promotion of alcoholic beverages seems to legitimate the use of the product which leads to high level of damage to individuals and society. By definition,
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alcohol advertising is one sided, avoiding any connection to the negative side of alcohol consumption. Today it is also necessary to enable alcohol to compete against other sorts of drugs as well as soft drinks. There is in fact some evidence that suggests that bans on alcohol advertising can have beneficial effect on the level of harm in the long-run (Ias fact sheet, 2005).
Understood from above, the alcohol market is a sensitive market where one carefully has to consider the marketing methods used in order to reach the targeted customer and at the same time follow the restrictions regulating the market. Thus the difficulties do not end there, understanding and adapting to legal restrictions across cultures is another challenge many multinational businesses face. Laws vary greatly between countries and a regulation that often needs to be translated contains unclear issues that are difficult to understand. More difficulties that foreign marketers come across are the presence of self regulation and voluntary compliance that exist in some countries (Taylor & Raymond, 2000). Industry self regulations vary greatly between countries since there are different organizations world wide that set standards on how advertising should be conducted with minimal governmen-tal interference (Lustberg, 1998).
In the United States the Bureau of Alcohol, Tobacco & Firearms (ATF) is one of the in-stances that regulate unfair advertising practices and unlawful actions when it comes to dis-tilled spirits, wine and malt beverages. Under the control of the ATF, alcohol advertising should conform and align with four specific regulations (Lustberg, 1998).
(1) to prevent the advertising to deceive the consumer, (2) to make sure that adequate information is provided to the customer concerning the identity and quality of the product, the alcoholic content and the individual or company that is accountable for the advertisement, (3) rule out false, obscene, misleading, offensive or abusing state-ments about competitors, (4) limit statestate-ments in the advertisement that are not com-patible with any part of the product’s brand (Lustberg, 1998).
In China alcohol producers are faced with regulations banning television commercials of sprits with 40 % alcohol content or over. There are also considerations for introducing a quota on the number of ads appearing in television and print. These regulations are a result of the debate that alcohol products contains too high level of grain and that it could have a harmful effect on consumers. Alcohol producers in China face restrictions not only for this specific category, but for advertising in general (Taylor & Raymond, 2000).
Thus, in today’s economy there are success stories of alcohol producers operating lucra-tively in different countries which prove that there must be ways to conduct identifiable marketing to different target groups around the world despite marketing regulations and cultural differences. One of these companies is the Swedish company ABSOLUT VODKA which have reached great success launching its products in a regulated market, namely in two of the worlds largest consumer markets. ABSOLUT VODKA has its largest market in the United States and one of its fastest growing markets is the republic of China (V&S Group, 2005a). This thesis will take a perspective from ABSOLUT VODKA in Sweden, this since the authors find it of interest to see how a Swedish company tries to adjust the media channels used to align with the cultural and legal differences that exists between these two countries. Further more also to see how ABSOLUT VODKA has managed and is currently managing the choice of media channels in the regulated markets of the United States and China
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1.2 Problem discussion
This thesis will investigate how differences in the choice of media channels in the United States and China can be explained by differences in culture and ways of communication as opposed to legal and ethical restraints. The authors have concentrated on a specific market, namely that of alcohol. This since, as stated before, the alcohol market is one of the most regulated markets today and therefore it is interesting to see how these regulations together with other differences influence the choice of media channels used.
The thesis will be written as a case study on the marketing efforts of a specific company operating in the regulated market of alcoholic beverages in more than one country. The company of our choice is one of Sweden’s marketing success stories, ABSOLUT VODKA. The thesis will look into which media channels that is currently used and which are most suitable for a regulated market in different countries from the perspective of ABSOLUT VODKA in Sweden.
Comparisons will, as stated, also be done between the United States and China to illustrate that the restrictions in a regulated market may vary from country to country as well as the communication and therefore it is interesting to see how these differences affect the media channels used.
Since the authors believe that there are ways to successfully communicate marketing strategies through the use of the right media channels they feel a need to investigate how these media channels are chosen in a regulated market in relation to culture and communication. There is also a need to compare the media channels used depending on the culture of operation, this to provide the reader with an understanding of how flexible the marketing process needs to be. The authors are making use of ABSOLUT VODKA for the research conducted, thus the result of the thesis will be of use to other companies, as well as to ABSOLUT VODKA, namely other players in the alcohol market or compa-nies operating in any regulated market. This since it can be useful for companies today to understand the impact culture, communication and regulations have on the choice of me-dia channels. Thus this thesis is not written to generalize all meme-dia channels in regulated markets but merely to analyse how culture and regulations impact the choice of media channels in a regulated market.
The thesis will be based on interviews with ABSOLUT VODKA in the United States and China. These will provide the authors with the present media channels used. By analysing these in respect to the theoretical framework presented in the thesis the authors will be able to see how the choice of media channels were made in respect to each country’s culture. In other words the authors want to investigate how a company’s marketing can successfully be communicated through different media channels in a society that already has a negative attitude toward a product that is being sold and its sometimes negative effects.
1.3 Purpose
The purpose with this thesis is to get an understanding of how differences in the choice of media channels in the United States and China can be explained by differences in culture and ways of communication as opposed to legal and ethical restraints.
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1.4 Definitions
In order for the reader to understand the statements, explanations and analysis in this thesis the authors feel the need to explain and emphasize the meaning of certain words that will have a central meaning to the understanding of this thesis and that can be interpreted in different ways.
This thesis treats the issue of different advertising medium in regulated markets making it im-portant for the reader to understand the meaning of the term. Advertising medium is any mean or communication used by the advertiser to convey the message to a target audience. Therefore every kind of press is a medium for communicating advertising (Yadin, 2002). In this thesis the authors will refer to advertising mediums as media channels.
Also affecting the advertising climate in a regulated market is the industry, self-regulation which is another method of controlling the content of an advertisement. The National Ad-vertising Division (NAD) is the organization primary responsible for setting industry stan-dards. NAD is made up by attorneys who review current applicable laws and from there create standards by which advertisers should obey in order to avoid governmental action (Lustberg, 1998).
1.5 Disposition
The disposition of this thesis will provide the reader with an understanding of the outline of the thesis. It will provide the reader with a visualized illustration of the disposition help-ing the reader to fully cope and be aware of it throughout the thesis. All of the parts will have their foundation in the United States and China with correspondence in the theoreti-cal framework presented.
5 Figure 1 - Disposition Method Background ABSOLUT VODKA ABSOLUT VODKA In the USA ABSOLUT VODKA In China 4.4 Dimensions of Culture 4.1 Media Chan-nels
The ABSOLUT VODKA Case ABSOLUT VODKA in China
Analysis Conclusion Problem/Purpose 4.5 Communica-tion 4.7 Regulated Markets 4.6 Business Ethics
The ABSOLUT VODKA Case ABSOLUT VODKA in the USA
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2 Company information – ABSOLUT VODKA
In the following section the authors will present the reader with information about ABSOLUT VODKAs development in the United States and China. Relevant information for the purpose of the thesis will be pre-sented as well.
ABSOLUT VODKA is currently the third largest spirit brand in the world. The brand and the production facilities are owned by the state in Sweden. It all started in 1879 when Lars Olsson Smith founded “Absolute Rent Brännvin”. What made this vodka special was that he used a new distillation method called continuous distillation, which is still used today (Absolut Vodka, 2006).
The Swedish company V&S Group, who is one of Europe’s largest alcohol beverage com-panies, decided one hundred years later to sell that same quality vodka in the United States under the name; ABSOLUT VODKA. The first bottle was sold in Boston 1979 and from there it has been a straight success. Within five years ABSOLUT VODKA was sold in eighteen countries and today it is sold in 126 markets all over the world (Absolut Vodka, 2006). It is well established in Europe and the United States and the most recent markets are in Asia and Latin America. ABSOLUT VODKA has always believed in tradition and it is the reason why they have always used the same well, all wheat comes from wheat fields nearby and the bottles come from local glassworks. This tradition is called “ONE SOURCE”, and that special source means Åhus which is located in southern Sweden. Åhus is the birthplace of the founder, Lars Olsson Smith and every drop of ABSOLUT is produced there (Absolut Vodka, 2006). ABSOLUT VODKAs strategy of “ONE SOURCE” and just-in-time gives them a unique competitive advantage. Their competitors are mainly other imported premium vodka brands such as Smirnoff from Russia and Grey Goose from France. ABSOLUT VODKAs marketing strategy have for more than 25 years have been to focus on the unique design of the bottle in their advertising, and it has turned out to be success (Absolut Vodka, 2006).
As seen above, ABSOLUT VODKA has increased their sales extensively to other coun-tries in the last 25 years. It is therefore interesting to look at how ABSOLUT go about when implementing their products in different countries with help of media channels. Down below it will be explained how and when ABSOLUT VODKA launched their prod-uct in the two countries that are being analyzed; United States and China.
2.1 In the United States
As mentioned before, the United States was the first country that ABSOLUT exported its vodka to and this was in 1979. It was first launched in Boston and moved later on to New York, Chicago, Los Angels and San Francisco. In just a couple of years it became a well es-tablished brand in the American market. The United States was the biggest market in the Western world but also the most competitive one. At that time United States avoided more than anything Russian products due to the political difficulties between the two countries and they recognized that people where willing to give more money to get higher quality. Carillon Importers Ltd saw that as a good reason for success and signed a contract with ABSOLUT VODKA. In 1985 ABSOLUT VODKA was the number one imported vodka in the United States (Absolut Vodka, 2006). Today ABSOLUT VODKA stands for half of the imported vodka in United States and in 2003 the sales was 73 million litres. This num-ber implies that ABSOLUT counts for more than 40% of the imported vodka in the
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United States (Reference.com, 2006) As seen above ABSOLUT VODKA has been very successful in the American market, the figures shows that it has been a fast development. It is therefore interesting to look at how they went about in their launch and how they came to dominate almost half of the imported vodka market with help of media channels. In the United States ABSOLUT VODKAs competitors are still other imported premium vodka brands. In the last couple of years there has been a tough competition between ABSOLUT, Smirnoff and Grey Goose. (Absolut Vodka, 2006)
2.2 In China
In 2003 ABSOLUT VODKA was launched in China and the sales have increased annually by 80% and today is accounting for 1% of the total Vodka market. China is today the big-gest market in Asia for ABSOLUT and the goal is by 2008 to increase the market share in China to 5% (Business Week, 2006). Compared to United States, ABSOLUT has only been around for a couple of years. They have had increasing sales, but as it is now, they focus mainly on the larger cities. In China ABSOLUT VODKAs main competitors are other im-ported vodka brands but also to some extent local spirit brands since the have a large part of the current market share (Business Week, 2006).
ABSOLUT VODKA as previously stated obtains 1% of the vodka market in China, this might seen as small figure compared to United States but if we look at the amount of peo-ple that lives in China the sales are not far from the one in the United States. When looking on the way of how ABSOLUT VODKA uses their media channels in China there might be explanations for the high sale. This will be further explained in the ABSOLUT VODKA case chapter.
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3 Methodology
This chapter aims at explaining the method used for the specific study and how the information has been collected to fulfil the purpose. This section consist of the following parts; case study, interviews, primary and secondary data, qualitative and quantitative method and reliability and validity.
This thesis intends to get an understanding of how differences in the choice of media channels in the United States and China can be explained by differences in culture and ways of communication as opposed to legal and ethical restraints. The authors decided to focus on ABSOLUT VODKA, which is a well known brand worldwide. Marketing alcohol beverages involve a number of limitations and restrictions and are therefore operating in a regulated market.
3.1 Qualitative and Quantitative methods
In deciding weather to use a qualitative or a quantitative research the difficulties of obtain-ing information in China had to be taken into consideration. If quantitative research where to be used there would be too many limitations that the result would most likely be biased. To statistically get significant results, a quantitative method on such large markets as the American and Chinese market, would take a tremendous amount of time and it would not be possibility to control and follow up such large amount of test results.
According to Sayre Shay (2001) there is an important difference in qualitative and quantita-tive research methods; they give answer to different questions. Qualitaquantita-tive methods are most suitable for marketing where it is believed to be a number of different truths and not just one (Shay, 2001). This supports the authors own thoughts on why a qualitative method is more appropriate for this kind of problem. This thesis is written from a market-ing point of view and it is most likely that there is not only one answer to the problem and it could therefore be solved in a number of ways. It all comes down to, which one the au-thors finds most suitable for the specific problem.
A qualitative research do not only focus on one method it uses multiple methods and it is definitely an advantage if they are interactive and humanistic. In a qualitative research the participants are involved in the data collection process and the researchers seek to build credibility with the individuals that are participating in the study. The research question might change throughout the data collection process, since it might become more obvious what questions that should be asked and whom it should be asked to (Creswell, 2003). In a quantitative method there are often a number of cases and subjects that are involved and the researcher does not interact physically with the cases or subjects (Grix, 2004).
Given the complex nature of the marketing problem of this thesis the authors have chosen a qualitative approach in line with the discussion put forth by Shay (2001). The reason for this is because the information and data collection process have been obtained from differ-ent sources on differdiffer-ent markets, the qualitative approach have given the authors the op-portunityto change the follow-up questions.
3.2 Case study
The authors have chosen to conduct a case study. This means that the researchers go into depth in a company, a program, a process, an event or an activity (Yin, 2003). In this thesis
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the Swedish brand, ABSOLUT VODKA will be analyzed and there will be a comparisonin the differences in the usage of media channels in China and the United States. The design and data collection plays an important role when conducting a case study. The main goal of a case study is to develop a groundwork concept which implies that it is relevant to put ap-propriate research literature into the case study. This is done to be able to get highly devel-oped knowledge and increasing the general understanding of the given topic. (Yin, 2003) One has to gather facts from literature, documents or people who have knowledge about the study that is being investigated and interpret and assess the facts thoroughly to avoid false statements and misunderstandings (David, 2006).
There are limitations to a case study as well. In this case study there will only be few indi-viduals involved and that makes it hard to draw conclusions for a general group. The au-thors are investigating a fairly complex topic from a narrow empirical study and that can lead to difficulties. At the same time this is what makes a case study useful, by investigating ABSOLUT VODKA it is most likely something that can be learn about the general phe-nomena.
The reason a case study approach has been chosen is to illuminate a marketing problem from a business point of view. By looking at the specific case of ABSOLUT one can get an insight of corporate strategies and marketing decisions.
3.3 Primary and secondary data
When writing this thesis the authors have used a number of resources to be able to reach a solution to the problem. Both secondary data and primary data have been used in the re-search. Primary data means that the collected information is for the specific investigation at hand. When collecting primary data the two most common methods used to gather infor-mation are either through communication or observation. (Gilbert, Churchill & Brown, 2004). In this thesis the primary data will come from communication, this involves ques-tioning respondents to secure the desired information. Through email the authors have in-terviewed employees at ABSOLUT VODKA both in China and the United States but also in Sweden. It is of great importance to obtain information from all three countries. The primary data will give the authors the opportunity to certain information while the secon-dary data will give structure and balance to the thesis.
Secondary data means that the information is not specifically gathered for the purpose at hand but rather for another intention. There are a number of advantages using secondary data, but the most significant ones are that it saves both time and money for the researcher. The researcher can just go to the local library or look online to be able to locate relevant sources and use the ones that are most appropriate for the specific problem (Gilbert et al., 2004). The authors will in this thesis base most of their findings on secondary data since there are a lot of existing readings and articles on the specific topic but there are also a number of problems that can arise when using secondary data. The data may not com-pletely fit the problem and it might not be comcom-pletely accurate (Gilbert et al., 2004). There-fore the authors will try to avoid it as much as possible by backing up the findings with the interviews with employees at ABSOLUT VODKA. Most of the secondary data used in this thesis comes from literature such as books and journals that is in relation to media channels but also from news articles that touch upon ABSOLUT VODKA and its advertising in the United States and China. First the authors had to gain significant knowledge about
differ-10
ent concepts and how alcohol is perceived in the two countries to be able to proceed suc-cessfully with the thesis.
3.4 Interviews
An interview separates itself from a regular conversation in a number of different ways. But the most important reason is that an interview has a purpose, it gives the interviewer a cer-tain kind of information. This means that the interviewer seeks information and the re-spondent gives information (Carlsson 1984). Carlsson (1984) believes that the advantages of conducting interviews are that the response frequency is higher, misunderstandings di-minish and it is easier for the respondents to express themselves more freely and sponta-neously.
Some might argue that it can not be called an interview if it is conducted through e-mail, the authors is of another opinion. From the authors point of view there are advantages by using e-mail for instance it increases the credibility because it gives the respondent time to sit down and in his own pace really reflecting over the given questions. Some questions might require some research for the respondent and then by further e-mail correspondence reduce misunderstandings. It is hard to control who actually answer the questions, but since the authors had phone contact with the respondents first this was not a problem. Interviews are divided into structured and unstructured interviews. In this study there will be a mix of the two. First the two concepts will be explained before going into depth of how the interviews of this thesis will be conducted. The information collected during struc-tured interviews is similar to the information that is gathered when using a questionnaire. The interviewer asks predetermined questions and they follow a special order. Structured interviews are used mostly when there are a lot of questions and they are opened questions. (Carlsson, 1984)
Unstructured interviews on the other hand are more flexible and they do not have to be asked in a specific order. It is easier for the respondent to give more elaborating answers and for the interviewer to ask follow up questions (Carlsson, 1984). In this study, there will be predetermined questions but they will not come in a specific order. The respondents will get the opportunity to elaborate and the interviewers will ask follow up questions, to get as much information as possible. The reason why predetermined questions are used is be-cause it is easier to compare and analyse the answers if the questions are similar in all cases.
3.4.1 Choice of respondents
To gather information through interviews involves first of all deciding who is going to be interviewed. When it comes to qualitative case studies, as in this case, it is dependent on what the researcher wants to investigate and what kind of information is important to the specific study (Merriam, 1994). To be able to get the information needed to fulfil the pur-pose of the study the authors decided to interview employees at ABSOLUT VODKA both in China and in the United States but also in Sweden.
The process of finding appropriate candidates to interview was a combination of using contacts at Jönköping International Business School and searching online for suitable can-didates on relevant positions within Vin & Sprit AB. Through a fellow student we got in contact with Vicky Chen who is a marketing manager at ABSOLUT VODKA in China,
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she is located at their office in Shanghai. She had the competence and experience to answer questions regarding ABSOLUT in China.
Through Vin & Sprits website the authors also got with Jennifer McDonald, Customer Re-lations, who is located at ABSOLUT VODKAs American office, she referred to the web-site and the information package for information. This helped a lot but the authors saw the need to contact someone who had the knowledge about the American market that could answer the specific questions. The authors later phoned Åsa Edlind who works as assistant marketer at V&S in Sweden; she helped to answer questions regarding the American mar-ket, with help of American employees.
The difficulties of finding someone at the ABSOLUT VODKAs American office might have some what limited the research. But at the same time, since the United States is ABSOLUT VODKAs largest consumer market the authors believe that the employees at the Swedish office posses adequate knowledge about the American market.
3.4.2 Question Guide
Patel and Davidsson(1991) states that it does not matter if it comes to an interview or a questionnaire, the first questions should always be neutral and between the beginning and the end is where the important questions are, it is where the interviewer touch upon the problem. There are also a number of aspects that the interviewer needs to take into ac-count when formulating the questions, long questions, leading questions and double ques-tions should be avoided. This has been taken into consideration when the authors formu-lated the questions. Open-ended questions are used in both cases, which imply that the re-spondents are able to answer the questions in their own words rather than choosing from a set of alternatives, but the question still is pre-determined (Gilbert et al., 2004).
Down below are the following question asked to the respondents the first time they where contacted. Later the authors asked follow-up questions depending on what the respondent answered.
1. What is ABSOLUT VODKA target group in the United States/China? 2. Which media channels (TV, radio, newspapers, magazines, and internet) is
ABSOLUT VODKA currently using in the United States/China? And why?
3. Are the media channels the same all over the country or do they vary by state or city? 4. Which of the media channels used in the United States/China, do ABSOLUT
VODKA perceive as the most effective and why?
5. ABSOLUT VODKA is operating in a regulated market in the United States/China, has this affected the choice of media channels used and the message communicated? 6. Has the media channels currently used in the United States/China always been the
same or have they changed over time, if so in what way?
7. Which cultural aspects has ABSOLUT VODKA in the United States/China taken into consideration communications its message?
8. Which product attributes is the advertising of ABSOLUT VODKA in the United States/China most focused on? (bottle, price, quality etc.)
9. Is the marketing strategy different in the United States/China depending on which media channel that is being used?
10. Does ABSOULT VODKA consider themselves as an ethical company even though it is producing and selling a product that can have a negative effect on people?
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11. What different regulations is there to consider when advertising a spirit in the United States/China?
3.5 Reliability and Validity
No matter which method that is used to gather information, it is very important to critically revise the information that are sought. This is useful when evaluating if the information is trustworthy and reliable. Reliability measures that under similar circumstances and line of action you will get the same result. Validity is another complex word, it is a measure if a certain question measures or describes what the author wants it to measure and describe. If a question or an answer lacks reliability it also lacks validity (Bell, 1994). However validity does not have an important role in qualitative inquiry, but validity is seen as important re-source in a qualitative research. It is used to determine if the findings are truthful from the researchers, the contributor or the readers’ point of view. It is recommended to discuss and identify more than one strategy to assure the accuracy of the findings (Creswell, 2003). The authors have to view the information given from the respondents critically to be able to enhance the credibility and validity. The authors have had a long-term discussion with employees at ABSOLUT VODKA and have looked into a number of different company sources to see that the information was cohesive. The website has been useful, this to see learn about the history and the plans for the future of ABSOLUT VODKA and to see if they are in line with the respondents answer.
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4 Frame of Reference
The frame of references aims at presenting existing theories and readings that are related to the specific pur-pose. This section starts with a description of media channels. Furthermore this section will deal with read-ings concerning communication, dimensions of culture, business ethics and regulated markets. Each of the sections will start with an objective view of the subject then the authors will look at each of the sections from the perspective of the two countries.
4.1 Media Channels
The theoretical framework will start with theories concerning the types of media channels that are subject of interest in this thesis. The reason why this is done is simply to enable the authors to answer the purpose of the thesis. Since the purpose is to understand how differ-ences in the choice of media channels can be explained by differdiffer-ences in culture and com-munication as opposed to laws and ethical restraints the reader have to be aware of which media channels the authors will refer to during the thesis. Further more it is also of impor-tance to be aware of the benefits and drawbacks of different media channels since these will play a role in the choice which one is most appropriate in relation to communication, culture, laws and regulations.
Media channels are means of communication and there exists two different types; print and electronic (Katz, 2003). Agreeing with this does Laczniak and Murphy (1993) who states that the different categories of media are print and broadcast, further they are also adding the direct marketing. The authors have concentrated on the former two and have decided to divide these categories of print and electronic media into magazines, newspapers, televi-sion, radio and internet. There will also be theories of how these different media channels work in the countries of interest; this is to provide the reader with an understanding of how different they can be depending of its circumstances.
4.1.1 Print media
Print media allows a presentation of detailed information that can be processed at the read-ers own pace and it is not intrusive but requires an effort from the reader in order to have an impact. Due to this fact, print media is often referred to as high-involvement media. The major forms of print media are magazines and newspapers which can reach a very se-lective audience and target market. Thus these different forms of print advertising present advantages and disadvantages that differs a lot (Belch & Belch, 1998).
Making use of advertising in
magazines gives the company a specialized advertising
through targeting a very specific audience. There are magazines designed to appeal to al-most every type of consumers when it comes to different interests and demographics. A magazine ad is attractive since it appeals to a specific consumer, small companies and large consumer product companies (Belch & Belch, 1998). This is also stated to be the case by Lazcniak and Murphy (1993) who states that magazines are targeted to specialized audi-ences. The possibility to advertise in magazines also makes it possible for companies with small budget to make a significant impact on a limited market (Barban & Dunn, 1978). Fur-ther more Laczniak and Murphy (1993) argue that magazine advertising have a highly per-suasive content and therefore are ethical questions about the message common.14
To understand the various types of magazines that are available to advertisers the Standard Rate & Data Service has classified them according to frequency of publication and by the audience it is directed to. Looking at the audience served there are three different types of magazines (Barban & Dunn, 1978). Thus each of these categories is further classified by the magazines editorial content and audience appeal (Belch & Belch 1998).
1. Consumer Magazines: are edited for people that buy different products for their own needs (Barban & Dunn, 1978).
2. Business magazines: are published for business readers and fall into three subgroups, (1) trade papers; are addressed to retailers and distributors, (2) industrial magazines; addresses business people that are involved in the different phases of manufactur-ing and (3) professional magazines; aims at professional people in general (Barban & Dunn, 1978).
3. Farm Magazines: aims at farmers and their families, since this group of people are a
distinct consumer group (Barban & Dunn, 1978).
There are a large amount of magazines available today and new ones are continuously in-troduced. They reaches a broad range of customers and in the United States 94% of all adults read magazines and about six different titles in a year (Katz, 2003). Therefore it is of importance for the advertiser to understand what type of magazines its target customer buys.
There are distinct advantages that magazines offer advertisers and these are stated by sev-eral authors.
Selectivity: One of the main advantages with this type of advertising is the ability to reach a specific target audience since few of them are trying to reach everyone. Different maga-zines are published for different interest groups and advertisers can also select magamaga-zines by demographics using editorial content and special editions. There are also possibilities for geographical selectivity focusing on certain cities and regions (Belch & Belch, 1998). Reproduction Quality: Advertising in magazines brings excellent reproduction in black and white or color. This is vital since magazines are a visual medium with illustrations as a dominant part of an ad (Belch & Belch, 1998).
Flexibility: Further more, advertising in magazines offer creative flexibility when it comes to the type, size and placement of the material (Belch & Belch, 1998).
Prestige: A product can also gain prestige by being advertised in a magazine that has a favor-able image. Companies that offer products that deeply rely on perceived quality and image often advertise in prestigious magazines with high quality editorial content whose consum-ers are interested in the advertising pages. (Belch & Belch, 1998)
Katz (2003) states that the benefits with magazine advertising are their high end audiences, the enthusiasm of those and the long run issue life of the medium. As can be seen does this benefits math those mentioned by Belch and Belch (1998).
Thus the advantages of magazine advertising are considerable there are some disadvan-tages. Katz (2003) states the main disadvantages to be the long planning cycle and the problem with reaching the readers. Belch and Belch (1998) thus carry the discussion further
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and claims that the drawbacks include the cost of placing the ads, the limited frequency and the problem of clutter and the massive advertising competition.
Another major form of print media is
Newspapers. The different types of newspapers
that exist carry special characteristics that are valuable to advertisers. The daily newspapers are published each weekday in cities and are read by a vast number of people. The weekly newspapers are published in smaller towns and suburbs and attract advertisers due to the lower absolute cost and geographic focus. National newspapers present editorial content appealing to the whole nation and a large circulation. Newspapers of this type mostly ap-peal to national advertisers and regional advertisers that make use for specific geographic editions (Belch & Belch, 1998).Ads appearing in newspapers can be divided in to categories which is useful to be aware of when choosing which kind of advertisement that best fit one’s target customer. This is of course of relevance to the marketer but also to the reader of this thesis in order to grasp the different advertising alternatives that are available.
1. Display advertising: often use illustrations, headlines and other visual devices to com-plement the copy text. There are two types of display advertising in newspapers, lo-cal and national. Lolo-cal advertising refers to ads by lolo-cal organizations and busi-nesses that want to reach the consumers in the market area served by the newspa-per. National advertising refers to display advertising done by marketers of branded products that are to be sold at a national level. (Belch & Belch, 1998)
2. Classified advertising: Ads that are classified are placed under subheads according to the product, service or offering being advertised (Belch & Belch, 1998).
Advertising in newspapers brings several advantages for both local and national advertisers no matter what kind of adverting is used.
The extensive penetration and high degree of market coverage is one of the primary advan-tages with newspaper advertising. This makes newspapers a mass medium and provides advertisers with an opportunity of reaching all targeted segments with their ads. Due to frequent publications advertisers can also build a high level of frequency in the media schedule (Belch & Belch, 1998).
Flexibility: Advertising in newspapers is flexible when it comes to requirements from pro-ducing and running the ad. Newspaper ads are also flexible in the sense of creativity. The ads can be produced in various shapes and sizes; they can use different colors to gain inter-est (Belch & Belch, 1998). Newspapers also provide timeliness with its possibility to pro-vide people with the latest news and information on products which makes the newspaper play an important role in the purchase decision (Katz, 2003).
Geographic selectivity: Advertisers can take advantage of the geographical selectivity concen-trating their advertising in areas with great sales potential (Belch & Belch, 1998).
Reader involvement and acceptance: Several consumers buy newspapers for the purpose of read-ing the ads. It is used to determine price and availability to see which product is most suit-able for the intention of the customer (Belch & Belch, 1998).
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Further more Katz (2003) argues that a newspaper reader is likely to be higher educated and have a higher income than non readers, and also to be more involved than non readers which make them a desirable audience.
In spite of these advantages with newspaper advertising there are some drawbacks. The limitations include poor reproduction quality, there is a short life span since a newspaper seldom is kept longer than one day, and there is a lack of selectivity when it comes to demographics and clutter further limit the effect of newspaper advertising (Belch & Belch, 1998). It can also be argued that the benefit stated before with newspapers attracting more involved readers could be seen as a drawback since active readers may not be drawn to the article or ad at all if it is not intriguing enough (Katz, 2003).
4.1.2 Broadcast media
According to Wolfgang J Koschnick (1995) broadcasting is all transmission signals over the radio or television.
Television advertising has the ability to combine visual images, sound, motion and color
which makes it the most creative appeals of all medium (Belch & Belch, 1998). Thus it is not all good with broadcast media, this since it is very intrusive it is frequently questioned on ethical grounds (Laczniak & Murphy, 1993). It is also looked at as a low involvement medium which leads to viewers that are not actively trying to gain information leading to advertisers trying to interest the consumer to watch the commercial. Therefore bears televi-sion a large burden of ethical criticism (Laczniak & Murphy, 1993). Thus the authors feel that the benefit Television has over the media is a great tool in the competitive market place today.Creativity and impact: The greatest advantage of television is the different opportunities it holds by combining sight and sound to present the message. It is also an excellent way to demonstrate a product (Belch & Belch, 1998). This is also supported by Katz (2003) who states that the most clear advantages with television advertising is its ability to use sight, sound, colors and motion in the commercials.
Coverage and cost effectiveness: Advertising selling products that appeal to a broad audience find that advertising on television reaches mass markets in a cost effective way. Companies with extensive distribution and accessibility use television advertising in order to reach the mass market and thereby deliver their advertising message in a very low cost per thousand cus-tomers (Belch & Belch, 1998). Television is seen as a medium that reaches the masses and through heavy repetition it builds brand awareness (Katz, 2003).
Captivity and attention: Televisions advertising are intrusive in the sense that we have to make an effort to avoid it. Thus there are increasing viewing options that make it easier for view-ers to avoid the ad. Television advertising is low in involvement thus it have an impact on viewers through heavy repetition and catchy slogans and jingles (Belch & Belch, 1998). Katz (2003) views it as the most persuasive medium due to the sticky jingles and characters that becomes a part of our lives.
Selectivity and flexibility: Television advertising offers some selectivity due to variations in the composition of audiences resulting from different program content, broadcast time and geographical coverage. Selectivity and flexibility can also be reached by taking advantage of different geographical markets through local spots in specific areas. They can be run
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peatedly or they can be run to take an advantage of a special occasion (Belch & Belch, 1998).
Disadvantages: Despite all the advantages there are with television advertising there are some drawbacks. These include high costs, limited exposure time, clutter and poor placement of the ads between programs (Katz, 2003). This is agreed upon by Belch and Belch (1998) who further states disadvantages such as lack of selectivity of a specific target audience that reduces the cost effectiveness and that the message is fleeting since they are short with nothing tangible for the viewer to consider.
Even though television has been referred to as the ideal advertising medium, the radio has survived and flourished as an advertising medium due to its advantages communicating messages to the market (Belch & Belch, 1998). It is also the oldest advertising medium and people still rely on it for information and entertainment (Katz, 2003).
Radio has numerous advantages over other media including its low cost and efficiency meaning that advertisers can build more reach and frequency into their media activity at a special budget, the selectivity available through program formats and geographical coverage through different stations, flexibility due to the possibility to alter with the message right before it is aired, its mental imagery letting the listener use their imagination when process-ing a commercial message, and the integrated marketprocess-ing opportunities (Belch & Belch, 1998). Adding to these advantages are that of the local appeal it possesses enabling you to take advantage of the opportunity to tie the ad lo local events (Katz, 2003).
However there are factors that limit the effectiveness of radio communicating messages, among them are the creative limitations and the absence of a visual image, fragmentation due to large number of different stations, chaotic buying procedures, limited research data, limited listener attention, clutter (Belch & Belch, 1998). The fact that it is a medium that is used as a background medium, we are usually doing something else when listening to the radio (Katz, 2003).
4.1.3 Internet marketing
The internet is according to Belch and Belch (1998) a means of exchanging information and communicating world wide through several interconnected computers accessible to all people with a computer and a modem. The World Wide Web has developed to be a com-mercial component used by many marketers today.
Advertising on the internet brings several advantages thus Katz (2003) argues that since the medium is still developing so is the benefits of it.
Target marketing: is possible to specific groups with a minimum of waste coverage. Follow-ing the direct targetFollow-ing is the ability to tailor the message. The web leads to high customer in-volvement due to the interactive nature of the media since visitors already are interested enough in the company to visit the site. The information access allows the website visitors all kinds of information available including new. The sales potential is high since the web is a di-rect response medium. The creativity at hand makes it possible to attract repeat visits and in-terest for the company through design and layout. Since the internet just keeps growing and growing the market potential is high (Belch & Belch, 1998). Katz (2003) states four dis-tinct advantages which can be related to those stated in the former description thus other labels are used but the meaning of them are closely connected.
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Belch and Belch (1998) continue the discussion of drawbacks with internet advertising and this is in line with those stated by Katz (2003). There are measurement problems since meas-ures of audience and effectiveness has not yet been established. One complaint is the amount of time it takes to access information. This problem, referred to as Web Snarl, will increase as more people try to access the internet. The number of ads on the internet is many and therefore the chance of one ad being noticed drops, this clutter is another prob-lem with advertising on the internet. The potential for deception is high referring to the adver-tiser’s attempts to target children with clever messages. The relatively high cost for advertising and delivery minimizes the advertising appeal of the web. Limited production quality is an-other problem since the internet does not reflect the high quality of television and print graphics (Belch & Belch, 1998).
4.1.4 Media Channels in the United States and China
Newspapers are the largest advertising medium in the United States when it comes to total advertising volume. Newspaper has fallen behind compared to both television and maga-zines when it comes to national advertising. The strength of newspapers is the possibility it presents for local advertisers to effectively use it on a regular basis. Newspapers are con-cerned with their future readers and where they will come from since youth in the United States are highly dependent on the broadcast media (Belch & Belch, 1998).
There are thousands of magazines published in the United States that appeals to every spe-cific consumer’s interest and lifestyle. Through the opportunity of this specialization this medium has prospered in the United States (Belch & Belch, 1998). To be exact the top 10 newspapers in the United States reaches approximately 10 million readers every day (Katz, 2003).
The average American household watches television about seven hours per day which is one of the highest viewing figures in the world, andthey have access to 75 channels (Katz, 2003). At any weekday more than 90 million people watch television during prime time be-tween 8 to 11 PM. Further more, 80 percent of the American households own a VCR and many of them have entertainment centers with big screen televisions’ (Belch & Belch, 1998).
Further more the American listens, on average, to the radio more than three hours per day. The radio is by many viewed as a constant companion in our everyday lives (Belch & Belch, 1998). There are 13 000 different radio stations in the United States and 95% of all the cars driving around are equipped with radios (Katz, 2003).
According to internetworldstats (2006) 68% of the population in the United States uses internet today. Thus it is stated in Katz (2003), which is an older version, that 54% of the country is using the internet from home. Belch and Belch (1998) states that in studies con-ducted in the United States the result shows that the heaviest users of the internet are in their 30’s with high or above average education and income.
Thus it is of more use for marketers to know why users access the internet, rather than who does it. Figure 2 is a useful profile of web users reflects their evaluations of the web’s offerings; this is done in American demographics presented by Belch and Belch (1998). Here one can see that the main reason for users to access the internet is for information access.
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Information Access Under 30 69%.
30 to 49 75%. 50 and older 73%. Communications 73%. 71%. . 68%. Education 53%. 63% 61% Advertising and 38% marketing 43% 32% Entertainment 41% 38% 21%
Buying and selling 32%
33%
22% Figure 2 – Internet
( Source: Belch & Belch, 1998)
According to Jonas Björksten in Fang (2005), during the last decades the standard of Chi-nese advertising has been poor. It is still common to see similar ads in a newspaper, each presenting the product with a celebrity.This provides the marketer in China with a unique chance to differentiate its offer. Newspapers in China are an important media channel with large publications. Thus it is important to keep in mind that publication figures in China is not no trust since advertising units count them up. Weekly magazines have increased in popularity, both local and international (Fang, 2005).
The most important media channel in China is the television. Thousands of channels fight over viewers today. The largest ones, as China Central television, are companies with great influence over the consumer market. Local stations have a smaller broadcasting area than the larger companies but in the different provinces and secluded cities they are more influ-ential (Fang, 2005).
According to Björksten in Fang (2005) the Chinese language will in a few years be the most used language on the internet. The use of internet has made entire business areas in China to change in a short period of time. In China today most retail companies are working ac-tively with internet in order to communicate with their customers and to keep a dialogue
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with them. The use of internet in China has given the creative marketer several new possi-bilities.
To conclude this theoretical part, the media channels in the United States and China have different attributes depending on the market structure that exists in the country of opera-tion. This consequently offers different opportunities for the company. For instance when it comes to print media in the United States it seems to the authors that the use of newspa-pers is important if ABSOLUT VODKA is aiming at spreading its brand amongst a great number of people since the medium offers reach on a regular basis. On the other hand when ABSOLUT VODKA is aiming at strengthen their brand among existing customers magazines provides a good opportunity since they can be directed towards a specific target group. There is no doubt in the author’s minds that television is most spread advertising medium in the United States. Thus the great number of people that watches it every day the advertisers has to keep in mind that their message may reach an unintended audience resulting in ethical issues. The internet users in the Unites States are increasing by the day. This provides the advertiser with great potential to reach out to new and existing customer. Even if the profile done by American Demographics in Belch and Belch (1998) states that the main reason for people to use the internet is for information access and that advertising and marketing is only the fourth reason, one has to keep in mind that the information ac-cess can be related to a product. If the marketing of a product is catchy enough it is likely that the customers search the web for more information about the product.
When it comes to China, the potential to differentiate ones products in newspapers should be emphasized. Thus it should be kept in mind that not all publications find its right desti-nation and therefore investments can be unprofitable. Since the television is a widespread medium in China it is a good alternative for the marketer. Thus it has to be reassured that the advertisements reach its intended audience. The television in China also provides com-panies with the possibility of geographical segmentation which would be beneficial in a country like China with varying conditions and living standards. The internet also provides opportunities to communicate with customers in China. Thus this can involve large costs, adjusting websites to align with local culture and communication. There is also in this case hard to estimate to what extent this medium reaches the targeted audience since there is no facts on how many people in China that is using the internet. There is a common appear-ance of internet cafés in China which further limits the appreciation of how many that en-ters the web every day.
4.2 Dimensions of culture
In today’s society, culture play’s an important role in companies’ success. If a company, that operates internationally, does not consider culture this will most likely lead to conse-quences later on. It is therefore important that the authors get fundamental knowledge about what culture is. Since this thesis intends to analyze media channels in United States and China it is vital to get knowledge about these two countries culture. This part will be based mostly on Hofstede’s dimensions of culture which also Marieke de Mooij has written about in the book Global Marketing and Advertising
Talking about differences in cultures one needs to define what the concept really means. According to Rice (1993) culture is defined as the values, attitudes, beliefs, artefacts and other important symbols that are represented in the life pattern adopted by human beings to help them interpret, evaluate and communicate as members of a society.
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De Mooij states in her book Global Marketing and Advertising (1998) that without models aimed at understanding and classifying cultural differences, a marketer can meet the objec-tion “not-invented-here” to a forced advertising from another country and culture.
Furthermore De Mooij (1998) claims that there are a relatively small number of models that have been developed in order to systematically compare cultures and that the most useful ones for global advertising are those that set apart dimensions of culture. These models can be used to make comparisons between cultures according to behavioural char-acteristics.
Gert Hofstede (1984) in De Mooij (1998) separates cultures according to the five dimen-sions; power distance, individualism versus collectivism, masculinity versus femininity, un-certainty avoidance and long-term orientation. These five dimensions of culture where originally used to explain differences in work related values thus they can be applied to consumption related values and motives as done by De Mooij (1998).
4.2.1 Power distance
The dimension of power distance can be explained as the extent to which members of a society are less powerful and the power is distributed unequally (De Mooij, 1998).
Power distance influences the way people accept and delegate authority. In cultures with large power distance everyone has his or her special place in the hierarchy ladder and in cultures with lower scores on power distance authority has a negative implication and they put much weight on equality on rights and opportunities. From these hierarchical relation-ships different dependency forms follow. When someone is dependent it reinforces the other person as superior in the hierarchical relationship (Hofstede, 1991).
4.2.2 Individualism vs. collectivism
The line between these two concepts can be separated if people are looking after them-selves and people in their immediate family only, or if they feel belonging to groups that look after them in exchange for loyalty (De Mooij, 1998).
In individualistic cultures individual decisions are highly valued in comparison to group de-cisions. There is also a difference when it comes to priority of the task. The individualistic culture priorities the task itself whereas the collectivistic culture priorities the relationship with people (Hofstede, 1991). In an individualistic culture there are more explicit, verbal communication and they are also more low context cultures. They are also a universalistic culture which makes people believe that there are some universal values that should be shared by everyone. The collectivist culture on the other hand people conscious and their identity is based on the social group they belong to. There is also a great importance of not loosing face since collectivistic cultures are shame cultures which make them high context cultures. Cultures that are collectivistic are well aware that peoples’ values are different (De Mooij, 1998).
